Alibaba elaborates on how it will use its 100 billion yuan ‘common prosperity’ fund – pointing to ‘high quality growth’ for all

Chinese e-commerce giant Alibaba Group Holding’s pledge of 100 billion yuan (US$15.5 billion) to help narrow the country’s wealth gap is not just about giving away money – it is aimed at building programmes that can help to “make the cake bigger”, the head of Alibaba’s charity said.

Aside from 20 billion yuan earmarked for Alibaba’s home province of Zhejiang, most of the remaining 80 billion yuan will be open for programmes that can leverage Alibaba’s advantages as a big platform, Simon Hu Xiaoming, the president of Alibaba’s public welfare group, told Chinese media Caixin this week. Alibaba owns the South China Morning Post.

Alibaba had an internal debate and concluded that common prosperity must be achieved via “high quality growth”, in which the e-commerce company can use its functions to help instead of simply writing a blank check. E-commerce platforms Taobao and Tmall can help to sell agricultural products, its health care unit Alibaba Health can help to improve services in rural areas, while online travel agency service Fliggy can help to boost tourism, Hu said.

Alibaba wants to build a “common prosperity model” in Zhejiang by 2025, said Hu. The initiative will first focus on 26 rural counties in the province to explore export business opportunities and promote high-quality local employment.

Hu’s remarks provided more details about the “common prosperity” plan, which consists of 10 initiatives including promoting investments in technology, supporting small businesses, fostering development in rural areas, helping small business expand overseas and improving the welfare of gig-economy workers.

Annual revenue at Hangzhou-based Alibaba was 717.3 billion yuan for the financial year ended March 31, 2021 and net income was 150.3 billion yuan during the same period, meaning that the 100 billion investment represents two-thirds of the company’s net profit in the last financial year.